Why you don't want to be involved in a food safety scare

Nothing can send you broke faster.

2015 was a bad year for US-based fast-food restaurant chain Chipotle Mexican Grill with the company experiencing several outbreaks of foodborne illness.

The company compared its second quarter 2016 (after all the foodborne illness outbreaks) results to those for the three months ending on 30 June 2015 (prior to the disease outbreaks):

• Net income decreased from $140.2 million to $25.6 million.
• Diluted earnings per share was $0.87, a decrease from $4.45.
• Revenue decreased 16.6% to $998.4 million.
• Comparable restaurant sales decreased 23.6%.
• Comparable restaurant transactions decreased 19.3%.
• Restaurant level operating margin was 15.5%, a decrease from 28.0%.

Chipotle offers a focused menu of burritos, tacos, burrito bowls (a burrito without the tortilla) and salads made from fresh, high-quality ingredients, prepared using classic cooking methods. The company claims to be “seeking better food from using ingredients that are not only fresh, but that — where possible — are sustainably grown and raised responsibly with respect for the animals, the land and the farmers who produce the food.”

The majority of food is prepared in each restaurant. Some exceptions are the beans and carnitas, which are prepared at a central kitchen in Chicago. None of the restaurants have freezers, microwave ovens or can openers.

But the best intentions in the world cannot overcome the detrimental effects of a food safety crisis. In Chipotle’s case there were four foodborne disease outbreaks in a six-month period. And they occurred all over the country.

The 81% drop in net income would kill the majority of businesses. In this case, the real effect of the food scares is sightly hidden as the company opened 58 more restaurants whose income would mask the effects of the poor publicity and consumer backlash somewhat.

What happened?

Two outbreaks of norovirus each involved a single restaurant. Both cases were likely caused by a Chipotle employee who worked while sick, in violation of strict policies designed to discourage this. But nevertheless, 243 people were sickened in the August outbreak and another 143 in December.

Also in August, a batch of Salmonella Newport-contaminated tomatoes sickened 64 people across 22 different restaurants.

Then in October and November a total of 60 restaurant patrons across 11 states were sickened by E. coli. E.coli was never detected in Chipotle food or on surfaces in restaurants but, because up to 10 days can elapse between eating contaminated food and the appearance of symptoms, the ingredient that contained the E.coli was to have been gone from the restaurants by the time tests were conducted.

So the real question is — are you sure your HAPPP plans are up to date and effective? If not, you are looking bankruptcy in the face.

Maybe you should consider registering for the 23rd annual Australian HACCP Conference, which is being held 5–6 October, in Melbourne (www.australianhaccpconference.com.au/registration).